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Motowin Auto Superstore is thinking about offering a two-year limited warranty for $915 on all new cars of a certain model.

a) Good business strategy
b) Unlikely to attract customers
c) Effective marketing approach
d) None of these

User Ajthinking
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1 Answer

7 votes

Final answer:

Choice D ('None of these') is correct in assessing Motowin Auto Superstore's warranty offering due to lack of cost and sales volume information. Warranties and money-back guarantees in the goods market can serve as effective marketing tools that build trust and encourage purchases.

Step-by-step explanation:

Assessing the potential impact of Motowin Auto Superstore offering a two-year limited warranty for $915 on all new cars of a certain model can be analyzed through various lenses. When comparing choice D with choice B, we must consider additional information, such as Motowin's cost to produce the cars and the volume of sales. Without that data, we cannot confidently assert that the strategy will significantly affect profitability. Hence, choice D ('None of these') is identified as the correct answer as the other options lack foundational support due to insufficient information. From a broader perspective, in the goods market, warranties and money-back guarantees serve as a promise of quality and can be crucial marketing strategies, particularly when goods are sold unseen via mail-order catalogs or the internet. This approach builds trust and can incentivize purchases, potentially leading to an enhanced reputation and customer loyalty in the long term.

User Pawan Samdani
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